Ophir Energy (LON:OPHR) shares surged over 11% after reports circulated that the company has become a takeover target. According to reports, the oil group has received merger and takeover interest from multiple suitors as oil prices remain in a slump.
No decision has been made as of yet, but the company is allegedly in early stages of deliberations after being approached from other companies and financial investors.
The oil company, which is active in Africa, has seen its shares plummet 36% in 2015, as oil prices took a sharp decline and weighed on Ophir.
Analysts were not surprised by the rumor, noting that the commodity crunch would undoubtedly cause peripheral players to become targets of takeover talk.
Earlier in the year, the company offloaded its 20% stake in 3 gas blocks offshore in Tanzania in a $1.3 million deal. Until last year, the group’s exploration assets were limited to Africa. Since then, it’s expanded into Southeast Asia.
The company now has low debt levels, and earlier this year, finally started generating revenue and operating cash flow after acquiring Salamander Energy.
Earlier this month, the stock was given a “neutral” rating, and analysts note that the company has previously shown “good form.”
Ophir’s stock was trading 7.6% higher before mid-day at 91p.